ECONOMY SERIES · NZ ELECTION 2026
How will New Zealand build lasting improvements in living standards?
Higher living standards depend on producing more value, not simply working longer hours. Research, skills, investment, technology, infrastructure and competition need to reinforce one another—and the gains need to reach people’s wages, opportunities and public services.
What is the problem—and why does it matter?
Productivity is about how much value we produce with the people, equipment and knowledge available. Labour productivity measures output per hour worked. Better equipment, useful research, stronger skills and better organisation can help people produce more within the same working time.
The OECD’s 2026 assessment identifies low investment and labour productivity as persistent weaknesses. It points to limited capital per worker, competition problems, gaps in skills and the spread of innovation. These constraints limit the scope for sustained increases in wages and the resources available for public services. Higher productivity creates that scope; tax, employment and public spending decisions help determine who benefits.
Evidence: OECD Economic Survey 2026: capital, innovation and productivity · OECD: Foundations for Growth and Competitiveness 2026
The election question: Which policies would remove these constraints, how would they work, and are the likely benefits worth the costs?
The issues need to be considered together
Ideas and capability
Sustain research, skills and independent analysis.
Investment and adoption
Help firms turn capital and technology into useful output.
Conditions for growth
Connect power, transport, housing, finance and competition.
Shared living standards
Judge real incomes, opportunities and public benefit.
From a promise to a result: Identify the problem, explain how the policy changes it, show who pays and who benefits, then publish what happened.
What could improve productivity—and what are the trade-offs?
The following are policy options to assess against the evidence. They can complement one another; none guarantees a productivity gain on its own.
| Equipment and technology | How it helps: Tax incentives and adoption support can lower the cost of better tools. Trade-off: Public money may subsidise purchases that firms would have made anyway; training and process changes still matter. |
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| Research and commercialisation | How it helps: Stable research funding, grants and R&D credits can support discovery and turn ideas into usable products. Trade-off: Returns are uncertain and can take years; commercial priorities must be balanced with health, environmental and other public-good research. |
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| Finance for growing firms | How it helps: Equity finance, investment funds and deeper capital markets can help firms expand without relying entirely on secured bank loans. Trade-off: Investors can lose money. Public funds need independent selection, clear objectives and evidence that they enable investment that would otherwise be missing. |
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| Skills and business capability | How it helps: Training and practical management support can help firms use new technology and improve working methods. Trade-off: Training takes time and must match actual needs; workers affected by change may need support. |
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| Infrastructure and market access | How it helps: Reliable infrastructure and fair access for new competitors can make productive investment viable. Trade-off: Infrastructure requires funding and delivery capacity; regulatory changes need to retain useful safety, environmental and consumer protections. |
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Explore the issues
Select a heading for the problem, its causes, the evidence and the outcomes policies should deliver.
Productivity: more value from each hour of work
What the evidence shows
Stats NZ’s productivity statistics distinguish labour productivity, capital productivity and multifactor productivity—the efficiency with which labour and capital are used together. Its measured-sector series covers selected industries, rather than the whole economy. The OECD identifies weak investment and persistent productivity gaps; it also links expensive, insecure electricity and limited access to finance to firms’ ability to invest. A short-term GDP recovery therefore does not, by itself, demonstrate a lasting productivity improvement.
What policies need to address
Name the channel: better equipment, skills, technology, infrastructure, competition or organisation. Distinguish total GDP growth from output per person and output per hour. A larger population or temporary construction surge need not deliver sustained productivity growth.
The result to look for: Track output per hour and real GDP per person over several years, against comparable economies and each policy’s stated mechanism.
Sources: Stats NZ: productivity statistics, 1978–2025 · OECD Economic Survey: New Zealand 2026
Science: institutions, people and sustained capability
What the evidence shows
Research generates knowledge that businesses and public services can use, but benefits may take years and are uncertain. Stats NZ’s 2024 survey reported R&D spending of $6.4 billion, or 1.54% of GDP, compared with 1.49% in 2022. The dollar increase is in current prices, not adjusted for inflation. MBIE’s Science Investment Plan 2026–2036 sets priorities, with five-year Pillar Investment Plans released in October 2026. These describe the government’s intended direction; they are not an independent evaluation of results. Voters need to distinguish changes to institutions from changes in the resources and capability available to do research.
What policies need to address
Assess public and business R&D, researchers and technical staff, infrastructure and continuity. Commercialisation matters, but so do public-good research, independent advice and capabilities whose value appears only over decades.
The result to look for: Report inflation-adjusted funding, R&D relative to GDP, workforce retention and research and commercial outcomes, with clear timeframes.
Sources: MBIE: Science Investment Plan 2026–2036 · Stats NZ: R&D survey 2024 · MBIE: Pillar Investment Plans 2026–2031
Innovative firms: moving from an idea to a viable business
What the evidence shows
The OECD finds New Zealand’s capital markets shallow by international standards. Innovative firms may have valuable ideas and software but little property to offer as security for a bank loan. Limited long-term equity finance can make it harder to develop a product, reach customers and expand. The OECD recommends improving the funding pathway from young firms through to larger businesses.
What policies need to address
Connect research, early customers, management, capital and export access. Public investment needs clear additionality: what useful activity happens because of the intervention that would not otherwise occur?
The result to look for: Track firm survival and scaling, business R&D, exports and additional private investment—not just grants awarded or money allocated.
Sources: OECD Economic Survey: New Zealand 2026
AI and digital tools: adoption, workers and public benefit
What the evidence shows
The OECD’s 2026 growth assessment reports that business broadband connectivity and AI use are below its average, and identifies low investment in digital technologies and intangible assets such as software and data. Buying a tool is only the first step: firms also need suitable data, skills and changes to working practices. Benefits depend on useful adoption, rather than the amount of technology purchased.
What policies need to address
Distinguish hosting a data centre from helping firms use technology productively. Include workforce training, rights, data governance, energy and water costs, and evaluation of service quality.
The result to look for: Measure adoption and useful results, job changes and resource demands. Faster processing is valuable only if service quality, safety and access also hold up.
Sources: OECD: Foundations for Growth and Competitiveness 2026
Skills, infrastructure and competition: does the plan fit together?
What the evidence shows
The OECD identifies electricity security, investment gaps and skills as constraints on productive activity. These problems interact: a business cannot make full use of new equipment if it lacks trained staff or a dependable power supply. MBIE’s long-term productivity briefing provides a wider framework for examining these connections. The policy assessment is whether measures solve the barriers together.
What policies need to address
A firm needs people, premises, power, transport and finance at the same time. Test whether housing and infrastructure allow workers to move, whether training meets demand, and whether regulatory changes preserve important public protections.
The result to look for: Publish progress on productive investment, workforce capability, infrastructure performance and real incomes, with regional and distributional breakdowns.
Sources: OECD Economic Survey: New Zealand 2026 · MBIE: productivity in a changing world
How do the seven parties’ policies relate to these needs?
This is a comparison of selected verified policies, not a complete inventory or a ranking of parties. The benefits and limitations are Social Herds’ assessment. Government programmes and election proposals are identified separately; a gap in this comparison does not establish that a party has no policy. Detailed household-cost and wider fiscal policies belong on the Cost of Living and New Zealand’s Economy pages.
National
| Published proposal or position | Government programme: Investment Boost encourages purchases of new capital assets. National’s Budget 2025 growth programme also includes phased increases in employer and employee KiwiSaver contributions. National: Budget 2025 growth programme |
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| Issue it addresses | Low investment per worker and limited long-term savings. |
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| Potential benefits | Could make equipment more affordable and build a larger pool of retirement savings. |
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| Limitations and questions | Some purchases may be brought forward or would have happened anyway. More saving does not automatically fund New Zealand innovation; assess where funds are invested and the effect of higher contributions on take-home pay and employer costs. |
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Labour
| Published proposal or position | Proposes an independently governed New Zealand Future Fund, separate from the NZ Super Fund, investing in infrastructure and innovative businesses. It would receive existing Crown assets and an initial capital contribution. Labour: New Zealand Future Fund |
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| Issue it addresses | Access to investment finance and the funding of productive infrastructure. |
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| Potential benefits | Could provide patient capital and support projects that private investors alone do not fund. The proposal separates individual investment decisions from ministerial direction. |
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| Limitations and questions | Transferring existing assets does not itself create new national wealth. Examine new funding, investment criteria, financial risks and whether the fund enables projects that would otherwise not proceed. |
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Greens
| Published proposal or position | Proposes reshaping Investment Boost, restoring core science funding, research fellowships and a coordinated pathway from ideas to export businesses, working towards R&D spending of 3% of GDP. Greens: economic development plan, October 2026 |
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| Issue it addresses | Research capability, continuity of funding and the gap between discoveries and commercial use. |
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| Potential benefits | Connects researchers, business development and longer-term funding, while supporting early- and mid-career scientific capability. |
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| Limitations and questions | A spending target does not establish the quality or value of research. Assess the funding timetable, researcher availability and how projects are chosen. Redirecting a broad investment incentive changes which firms benefit. Published job estimates are party projections. |
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ACT
| Published proposal or position | Proposes removing tax on KiwiSaver investment earnings and discontinuing the government contribution, within its wider fiscal plan. ACT: Fiscal Plan 2026 |
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| Issue it addresses | Long-term saving and the supply of investment capital. |
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| Potential benefits | Tax-free returns could increase the amount retained and compounded in retirement accounts. |
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| Limitations and questions | The benefit depends on account balances, returns and tax rates. Removing the government contribution changes the benefit for lower-balance savers. Larger retirement funds do not necessarily invest in domestic productive firms; examine the net fiscal cost and investment destination. |
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New Zealand First
| Published proposal or position | Proposes returning 50% of mining royalties to the region where they were generated. NZ First: mining royalties proposal |
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| Issue it addresses | Regional benefits from resource development and the allocation of revenue. |
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| Potential benefits | Could give affected regions more resources for local priorities and strengthen the local benefit from extraction. |
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| Limitations and questions | This redistributes revenue; it does not itself raise output per hour. Assess the use of funds, central government revenue forgone, commodity-price volatility, environmental costs and who pays for rehabilitation. |
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Opportunities Party (TOP)
| Published proposal or position | Proposes lifting R&D spending to at least 2% of GDP, technology-adoption tax credits, wider R&D credit access, regional innovation hubs and stronger support for small businesses. TOP: Breakthrough Economy |
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| Issue it addresses | Research investment, adoption of technology and firms’ capacity to innovate. |
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| Potential benefits | Combines research with practical support for applying technology, and recognises that smaller firms may need help accessing existing incentives. |
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| Limitations and questions | The party estimates additional annual operating funding of $1.33 billion. Assess its funding source, implementation capacity and whether support generates extra activity rather than subsidising existing plans. Its growth estimates are forecasts, not demonstrated results. |
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Te Pāti Māori
| Published proposal or position | Its published policy overview supports Māori-led enterprise institutions and funds, trade, innovation, long-term wealth building and protection of Māori data and knowledge. Te Pāti Māori: policy overview |
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| Issue it addresses | Māori ownership, participation in innovation and access to enterprise support. |
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| Potential benefits | Could strengthen Māori-led investment and connect economic development with community priorities and long-term stewardship. |
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| Limitations and questions | The overview reviewed does not provide enough detail to assess fund size, selection rules, administration or expected productivity effects. Those details are needed for a firmer assessment; this is a limit of the material reviewed, not proof that no further policy exists. |
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How will voters know whether policies have worked?
Look for sustained improvements in output per hour, alongside real wages and household incomes. For individual policies, track additional business investment, useful technology adoption, research capability, firms reaching new markets and the cost to taxpayers. Publish who benefits and the effects on workers, regions and the environment. Money allocated, agencies reorganised and jobs forecast are starting points—not completed outcomes.
Sources and how to read this comparison
Updated 21 October 2026. Official statistics and OECD analysis describe different periods and measures; publication dates are not necessarily the year measured. Stats NZ’s measured-sector productivity series does not cover the entire economy. Output per hour, GDP per person and total GDP answer different questions.
Independent and official evidence is linked within the issue sections. MBIE plans describe government intentions; party sources establish what parties propose. Neither is treated as proof of effectiveness. The options and policy assessments are Social Herds’ interpretation of the evidence, including potential benefits and risks rather than predictions of success. Party spending, growth and jobs estimates remain party estimates.
